The Life Insurance Corporation of India (LIC) is the country’s largest investor and it plans to invest a record ₹ 2.4 trillion across markets, according to reports. This may help it to maximize returns for policy shareholders and work as a vital support system for the Indian markets in FY 2023-24.
However, here are a few large-cap stocks in which the LIC already holds more than a 10 percent stake:
Coal India
Coal India is engaged in the mining and production of coal and it also operates coal washeries. It provides coal to sectors like cement, fertilizers, brick kilns and so on. The company has a market capitalization of ₹ 1,41,989 crores and its shares closed at ₹ 229.55 apiece on Thursday.
The insurance behemoth has 67,80,15,625 shares or an 11 percent stake in the company as of the March quarter of FY23.
Coal India has an ideal return on equity of 43.58 percent and a debt-to-equity ratio of 0.07. Moreover it has a high dividend yield of 10.09 percent and its shares were trading at a price-to-earnings ratio (P/E) of 4.84, which is lower than the industry P/E of 6.31, indicating that the stock might be undervalued as compared to its peers.
Hero Motocorp
Hero Motocorp, formerly known as Hero Honda is one of India’s first motorcycle manufacturers. It sold its 26 percent stake in the company to the Munjals (promoters) and ended the joint venture with the Japanese company Honda, in 2011. It has a market capitalization of ₹ 48,880 crores and its shares closed at ₹ 2448.55 apiece on Thursday.
The shareholding pattern of the company shows that LIC has 2,24,35,838 shares or an 11.23 percent stake in the company for the quarter that ended on March 31, 2023.
Hero Motocorp has a return on equity of 14.82 percent and an ideal debt-to-equity ratio of 0.04. It has a dividend yield of 3.37 percent. However, its shares were trading at a price-to-earnings ratio of 18.70, which is higher than the industry P/E of 14.77, indicating that the stock might be overvalued as compared to its peers.
IDBI Bank
IDBI Bank is engaged in the business of monetary intermediation of commercial banks, savings banks, postal savings banks and discount houses. The bank has a market capitalization of ₹ 56,343 crores and its shares closed at ₹ 52.60 apiece on Thursday.
The domestic institutional investor held 5,29,41,02,939 shares or a 48.24 percent stake in the company.
IDBI Bank has a market capitalization of ₹ 56,343 crores and is a large-cap company. It has a low return on equity of 6.32 percent and an ideal debt-to-equity ratio of 0.35. Its shares were trading at a price-to-earnings ratio of 17.48, which is higher than the industry P/E of 9.05, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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